Coal-to-liquids vs. energy efficiency and renewable energies

By Kenneth Barbalace

[Thursday, June 14, 2007]

Today the New York Times has a new article on the coal-to-liquids (CTL) subsidies and loan guarantees that are working their way through Congress. The more I look at this issue the more I see that CTL is not about getting the best value out of our energy investments, but rather it is another big industry trying to get as much pork out of the federal treasury as is possible.

For just a moment, let us compare and contrast CTL against other measures to reduce our dependence upon foreign oil and fossil fuel energies.

As I reported yesterday, Google and Intel have founded the Climate Savers Computing Initiative. This initiative has the stated goal of reducing computer energy consumption 50% by 2010. This is the equivalent of removing 11 million cars from the road or shutting down twenty 500 megawatt coal or oil fired power plants. When you compare how much energy savings that can be achieved by ideas as simple as building better computers against how much it will cost to replace just 10% of the U.S. need for crude oil with coal-to-liquids; you will start to see that there are much better ways for the U.S. Congress to be investing taxpayer money to reduce our dependence on foreign oil.

The problem is that big energy industries like the coal industry want to find ways to increase their profits and thus increase our dependence on their energy products. If Congress focused their energy investments on energy efficiency and renewable energies (e.g. more efficient solar panels put on private homes), the big energy companies would not be able to sell us as much energy, and would not make as much money. Thus, the energy industry lobbies Congress for investments in technology like CTL that are really good for their own interests, but are not that good for our national interests.

Everything in our lives from the computers we use, to the cars we drive, to the homes we live in are so inefficient that we may be able to virtually eliminate our dependence on foreign oil if these things were simply made more energy efficient using existing technologies. As has been pointed out, in the case of computers, over half of the energy they consume is wasted. The same is true with the average home we live in. By simply using better building techniques the energy consumption of the typical home could be cut by at least half. According to the U.S. Department of Energy, only 12.6% of the potential energy in the fuel cars burn actually translates into forward motion; the rest is wasted to heat, friction, idling, etc. How much oil would be saved if the fuel economy of the cars we drive was increased by 10mpg? How much would this really cost compared to the investments required for CTL?

The best the coal industry can "promise" with a $200 billion investment is a replacement of 10% of the U.S. crude oil needs in twenty years. Yet the computer industry is saying it can deliver a 50% world wide reduction in energy consumed by computers by 2010. According to a report by the American Council for an Energy-Efficient Economy by enacting basic energy codes using existing technologies all new homes and buildings being built today could consume 50% less energy for an added construction cost that would be offset by lower energy costs in about 10 years for the average homeowner.

Coal-to-liquids is a boondoggle because it is an unneeded technology that is way too expensive. The money that the government would spend on CTL would be much better spent on investments in energy efficiency and renewable resources, as these would have a much higher payback in terms of reducing our dependence upon oil and other fossil fuels. In addition, investments in energy efficiency and renewable resources would have the environmental advantage of significantly cutting our greenhouse gas emissions and thus would help slow climate change.

We need energy policies that place a priority on getting the best possible return on investment, and coal-to-liquids is not that investment.